The Internal Revenue Service (IRS) has a toolbox full of tools it can use against taxpayers who fail to pay their tax obligations. One tool it recently threatened to wield against taxpayers with significant debt: the ability to revoke the taxpayer’s passport.
Can the IRS really take away my passport?
Yes. Under a provision within the Fixing America’s Surface Transportation (FAST) Act, the agency will notify the State Department of any taxpayer that owes a “significant tax debt.” The State Department will then deny the individual’s passport application or renewal. For those with a current passport, the agency can revoke the passport or limit the individual’s ability to leave the U.S.
What is a “significant tax debt” for purposes of this law?
The law currently defines a “significant” debt as $52,000 or more.
What should I do if my passport is in jeopardy?
Taxpayers have options. You can resolve the debt with the IRS. Examples that may be available include:
- Payment plan. Those who cannot pay the debt in full could qualify for a payment plan, paying off smaller portions of the debt over a longer period of time.
- Offer in compromise. This option involves offering the IRS a payment that is less than the actual owed amount. In some cases, the IRS will accept the lower payment. The IRS will conduct a review of your finances before choosing to accept or deny the proposed offer.
The agency will notify a taxpayer before it contacts the State Department. Taxpayers who receive this notification are wise to take the communication seriously. An attorney can discuss these and other options to better ensure your interests are protected.